Grace William is the registered proprietor of lot 3 in Rockhampton. In 2017 Grace sold his parking lot to Alex. Grace and Alex signed a contract and agreed on a price of $200,000. Alex paid Grace the $200,000 in full for the parking lot.

In 2020, Grace moved into retirement village and gave his lot 3 in Rockhampton to his son Allen, who became the registered proprietor. Allen then uses the property as security for a $600,000 loan from capital bank.

In 2021 Allen's friend Zac rang capital bank and spoke to Tamanna informing Tamanna Allen had asked him to arrange for a further $400,000 loan using lot 3 as security. Zac informed Tamanna he will bring in a mortgage document Allen had signed. Zac had not discussed this with Allen. Allen is completely unaware of Zac`s doing. Zac forged Allen`s signature. Tamanna thought it was odd Allen had not spoken to him about the loan, but he knew Allen and Zac were business partners, so he arranges for the money to be transferred to Zac`s personal account and he registered the second mortgage over lot 3.

Allen continues to pay monthly on his $600,000 loan while Zac did the same for his $400,000 loan. As business continue to go badly. Zac stopped paying and informed the bank he can no longer make this repayment. Tamanna immediately panics and as he had not informed his boss of the second mortgage, so he decided to transfer the mortgage to his uncle to buy time. His uncle became the registered proprietor of the second mortgage.

In 2022 after bad business Allen decided to sell lot 3 and pay off his $600,000 loan. The bank manager asked Allen about the second loan of $400,000. Allen advises him he knew nothing about it. The bank manager did some investigation and advised Allen to contact a solicitor for advice.

You are a lawyer at the firm Allen consults, to write a memo setting out his right in relation to lot 3.